MECHANICSBURG, Pa., Nov. 2, 2023
/PRNewswire/ -- Select Medical Holdings Corporation ("Select
Medical," "we," "us," or "our") (NYSE: SEM) today announced results
for its third quarter ended September 30, 2023, and the
declaration of a cash dividend.
For the third quarter ended September 30, 2023, revenue
increased 6.2% to $1,665.7 million,
compared to $1,567.8 million for the
same quarter, prior year. Income from operations increased 42.1% to
$130.0 million for the third quarter
ended September 30, 2023, compared to $91.5 million for the same quarter, prior
year. For the third quarter ended September 30, 2023, income
from operations included $0.5 million
of other operating income, compared to $8.4 million of other
operating income for the same quarter, prior year. The other
operating income for the third quarter ended September 30, 2022, was principally related to
the recognition of payments received under the Coronavirus Aid,
Relief, and Economic Security Act Public Health and Social Services
Emergency Fund, also referred to as the Provider Relief Fund. Net
income increased 59.5% to $60.8
million for the third quarter ended September 30, 2023,
compared to $38.1 million for the
same quarter, prior year. Adjusted EBITDA increased 26.6% to
$193.8 million for the third quarter
ended September 30, 2023, compared to $153.1 million for the same quarter, prior year.
Earnings per common share increased 75.8% to $0.38 for the third quarter ended
September 30, 2023, compared to $0.21 for the same quarter, prior year. Adjusted
earnings per common share increased 113.7% to $0.46 for the third quarter ended
September 30, 2023, compared to $0.21 for the same quarter, prior year. Adjusted
earnings per common share excludes the loss on early retirement of
debt and related costs, and their related tax effects for the third
quarter ended September 30, 2023. The definition of Adjusted
EBITDA and a reconciliation of net income to Adjusted EBITDA are
presented in table IX of this release. A reconciliation of earnings
per common share to adjusted earnings per common share is presented
in table X of this release.
For the nine months ended September 30, 2023, revenue
increased 5.3% to $5,005.2 million,
compared to $4,752.1 million for the
same period, prior year. Income from operations increased 39.3% to
$440.6 million for the nine months
ended September 30, 2023, compared to $316.4 million for the same period, prior year.
For the nine months ended September 30, 2023, income from
operations included $1.2 million of
other operating income, compared to $23.6
million for the same period, prior year. The other operating
income for the nine months ended September
30, 2022, was principally related to the recognition of
payments received under the Provider Relief Fund. Net income
increased 48.4% to $237.9 million for
the nine months ended September 30, 2023, compared to
$160.3 million for the same period,
prior year. Adjusted EBITDA increased 26.0% to $627.4 million for the nine months ended
September 30, 2023, compared to $498.0
million for the same period, prior year. Earnings per common
share increased 52.8% to $1.55 for
the nine months ended September 30, 2023, compared to
$1.01 for the same period, prior
year. Adjusted earnings per common share increased 60.8% to
$1.63 for the nine months ended
September 30, 2023, compared to $1.01 for the same quarter, prior year. Adjusted
earnings per common share excludes the loss on early retirement of
debt and related costs, and their related tax effects for the nine
months ended September 30, 2023. The definition of Adjusted
EBITDA and a reconciliation of net income to Adjusted EBITDA are
presented in table IX of this release. A reconciliation of earnings
per common share to adjusted earnings per common share is presented
in table X of this release.
Company Overview
Select Medical is one of the largest operators of critical
illness recovery hospitals, rehabilitation hospitals, outpatient
rehabilitation clinics, and occupational health centers in
the United States based on number
of facilities. Select Medical's reportable segments
include the critical illness recovery hospital segment, the
rehabilitation hospital segment, the outpatient rehabilitation
segment, and the Concentra segment. As of September 30, 2023,
Select Medical operated 107 critical illness recovery hospitals in
28 states, 33 rehabilitation hospitals in 13 states, 1,946
outpatient rehabilitation clinics in 39 states and the District of Columbia, and 539 occupational
health centers in 41 states. At September 30, 2023, Select
Medical had operations in 46 states and the District of Columbia. Information about Select
Medical is available at www.selectmedical.com.
Critical Illness Recovery Hospital Segment
For the third quarter ended September 30, 2023, revenue for
the critical illness recovery hospital segment increased 7.4% to
$563.6 million, compared to
$524.6 million for the same quarter,
prior year. Adjusted EBITDA for the critical illness recovery
hospital segment increased 321.0% to $46.4
million for the third quarter ended September 30, 2023,
compared to $11.0 million for the
same quarter, prior year. The Adjusted EBITDA margin for the
critical illness recovery hospital segment was 8.2% for the third
quarter ended September 30, 2023, compared to 2.1% for the
same quarter, prior year. Certain critical illness recovery
hospital key statistics are presented in table VII of this release
for the third quarters ended September 30, 2023 and 2022.
For the nine months ended September 30, 2023, revenue for
the critical illness recovery hospital segment increased 3.6% to
$1,732.6 million, compared to
$1,672.2 million for the same period,
prior year. Adjusted EBITDA for the critical illness recovery
hospital segment increased 181.5% to $188.6
million for the nine months ended September 30, 2023,
compared to $67.0 million for the
same period, prior year. The Adjusted EBITDA margin for the
critical illness recovery hospital segment was 10.9% for the nine
months ended September 30, 2023, compared to 4.0% for the same
period, prior year. Certain critical illness recovery hospital key
statistics are presented in table VIII of this release for the nine
months ended September 30, 2023 and 2022.
Rehabilitation Hospital Segment
For the third quarter ended September 30, 2023, revenue for
the rehabilitation hospital segment increased 7.7% to $247.1 million, compared to $229.4 million for the same quarter, prior year.
Adjusted EBITDA for the rehabilitation hospital segment increased
7.7% to $53.6 million for the third
quarter ended September 30, 2023, compared to $49.8 million for the same quarter, prior
year. The Adjusted EBITDA margin for the rehabilitation
hospital segment was 21.7% for each of the third quarters ended
September 30, 2023 and 2022. Certain rehabilitation hospital
key statistics are presented in table VII of this release for the
third quarters ended September 30, 2023 and 2022.
For the nine months ended September 30, 2023, revenue for
the rehabilitation hospital segment increased 6.0% to $719.4 million, compared to $678.9 million for the same period, prior year.
Adjusted EBITDA for the rehabilitation hospital segment increased
9.5% to $155.5 million for the nine
months ended September 30, 2023, compared to $142.0 million for the same period, prior year.
The Adjusted EBITDA margin for the rehabilitation hospital segment
was 21.6% for the nine months ended September 30, 2023,
compared to 20.9% for the same period, prior year. Certain
rehabilitation hospital key statistics are presented in table VIII
of this release for the nine months ended September 30, 2023
and 2022.
Outpatient Rehabilitation Segment
For the third quarter ended September 30, 2023, revenue for
the outpatient rehabilitation segment increased 2.4% to
$291.8 million, compared to
$285.0 million for the same quarter,
prior year. Adjusted EBITDA for the outpatient rehabilitation
segment increased 2.5% to $26.3
million for the third quarter ended September 30, 2023,
compared to $25.7 million for the
same quarter, prior year. The Adjusted EBITDA margin for the
outpatient rehabilitation segment was 9.0% for the third quarters
ended September 30, 2023 and 2022. Certain outpatient
rehabilitation key statistics are presented in table VII of this
release for the third quarters ended September 30, 2023 and
2022.
For the nine months ended September 30, 2023, revenue for
the outpatient rehabilitation segment increased 5.5% to
$890.7 million, compared to
$844.2 million for the same period,
prior year. Adjusted EBITDA for the outpatient rehabilitation
segment increased 4.1% to $89.4
million for the nine months ended September 30, 2023,
compared to $85.9 million for the
same period, prior year. The Adjusted EBITDA margin for the
outpatient rehabilitation segment was 10.0% for the nine months
ended September 30, 2023, compared to 10.2% for the same
period, prior year. Certain outpatient rehabilitation key
statistics are presented in table VIII of this release for the nine
months ended September 30, 2023 and 2022.
Concentra Segment
For the third quarter ended September 30, 2023, revenue for
the Concentra segment increased 6.6% to $474.0 million, compared to $444.6 million for the same quarter, prior year.
Adjusted EBITDA for the Concentra segment increased 9.9% to
$98.9 million for the third quarter
ended September 30, 2023, compared to $90.0 million for the same quarter, prior year.
The Adjusted EBITDA margin for the Concentra segment was 20.9% for
the third quarter ended September 30, 2023, compared to 20.2%
for the same quarter, prior year. Certain Concentra key statistics
are presented in table VII of this release for the third quarters
ended September 30, 2023 and 2022.
For the nine months ended September 30, 2023, revenue for
the Concentra segment increased 6.7% to $1,397.3 million, compared to $1,309.4 million for the same period, prior year.
Adjusted EBITDA for the Concentra segment increased 7.7% to
$293.0 million for the nine months
ended September 30, 2023, compared to $272.1 million for the same period, prior year.
The Adjusted EBITDA margin for the Concentra segment was 21.0% for
the nine months ended September 30, 2023, compared to 20.8%
for the same period, prior year. Certain Concentra key statistics
are presented in table VIII of this release for the nine months
ended September 30, 2023 and 2022.
Dividend
On November 2, 2023, Select Medical's Board of Directors
declared a cash dividend of $0.125
per share. The dividend will be payable on or about
November 28, 2023, to stockholders of record as of the close
of business on November 15, 2023.
There is no assurance that future dividends will be declared.
The declaration and payment of dividends in the future are at the
discretion of Select Medical's Board of Directors after taking into
account various factors, including, but not limited to, Select
Medical's financial condition, operating results, available cash
and current and anticipated cash needs, the terms of Select
Medical's indebtedness, and other factors Select Medical's Board of
Directors may deem to be relevant.
Stock Repurchase Program
The Board of Directors of Select Medical has authorized a common
stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock.
The common stock repurchase program will remain in effect until
December 31, 2025, unless further extended or earlier
terminated by the Board of Directors. Stock repurchases under this
program may be made in the open market or through privately
negotiated transactions, and at times and in such amounts as Select
Medical deems appropriate. Select Medical funds this program with
cash on hand and borrowings under its revolving credit
facility.
Select Medical did not repurchase shares under its authorized
stock repurchase program during the nine months ended
September 30, 2023. Since the inception of the common stock
repurchase program through September 30, 2023, Select Medical
has repurchased 48,234,823 shares at a cost of approximately
$600.3 million, or $12.45 per share, which includes transaction
costs.
Financing Transactions
On July 31, 2023, the Company
entered into Amendment No. 8 to the Select credit agreement.
Amendment No. 8 provides for a new tranche of term loans in an
aggregate principal amount of $2,103.0 million to replace the existing
term loans and a $710.0 million
new revolving credit facility to replace the $650.0 million existing revolving credit
facility. The term loans and the extended revolving credit facility
will mature on March 6, 2027, with an
early springing maturity 90 days prior to the senior notes
maturity, triggered if more than $300.0 million of senior notes remain
outstanding on May 15, 2026. The term
loans have an interest rate of Term SOFR plus 3.00% and the
revolving credit facility has an interest rate of Adjusted Term
SOFR (which includes a 0.10% credit spread adjustment) plus 2.50%,
in each case, subject to a leverage-based pricing grid. During the
three months ended September 30,
2023, the Company recognized a $14.7
million loss on early retirement of debt as a result of the
amendment to the Select credit agreement.
On August 31, 2023, the Company
entered into Amendment No. 9 to the Select credit agreement.
Amendment No. 9 increased the revolving credit facility commitments
from $710.0 million to
$770.0 million.
Business Outlook
We are maintaining our business outlook for 2023 with expected
revenue to be in the range of $6.55
billion to $6.7 billion,
expected Adjusted EBITDA in the range of $795.0 million to $825.0
million, and fully diluted earnings per share to be in the
range of $1.77 to $1.94. Select Medical expects adjusted earnings
per share, which was revised to exclude the actual tax-effected
loss on early retirement of debt, to be in the range of
$1.85 to $2.02. Reconciliations of full year 2023 Adjusted
EBITDA expectations to net income and adjusted earnings per share
to fully diluted earnings per share are presented in table XI of
this release.
Conference Call
Select Medical will host a conference call regarding its third
quarter result and its business outlook on Friday, November 3, 2023, at 9:00am ET. The conference call will be a live
webcast and can be accessed at Select Medical Holdings
Corporation's website at www.selectmedicalholdings.com. A replay of
the webcast will be available shortly after the call through the
same link.
For listeners wishing to dial-in via telephone, or participate
in the question and answer session, you may pre-register for the
call at Select Medical Earnings Call Registration to
obtain your dial-in number and unique passcode.
* * *
* *
Certain statements contained herein that are not descriptions of
historical facts are "forward-looking" statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995),
including statements related to Select Medical's 2023 and long-term
business outlook. Because such statements include risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements due to
factors including the following:
- adverse economic conditions including an inflationary
environment could cause us to continue to experience increases in
the prices of labor and other costs of doing business resulting in
a negative impact on our business, operating results, cash flows,
and financial condition;
- shortages in qualified nurses, therapists, physicians, or other
licensed providers, and/or the inability to attract or retain
qualified healthcare professionals could limit our ability to staff
our facilities;
- shortages in qualified health professionals could cause us to
increase our dependence on contract labor, increase our efforts to
recruit and train new employees, and expand upon our initiatives to
retain existing staff, which could increase our operating costs
significantly;
- the continuing effects of the COVID-19 pandemic including, but
not limited to, the prolonged disruption to the global financial
markets, increased operational costs due to recessionary pressures
and labor costs, additional measures taken by government
authorities and the private sector to limit the spread of COVID-19,
and further legislative and regulatory actions which impact
healthcare providers, including actions that may impact the
Medicare program;
- changes in government reimbursement for our services and/or new
payment policies may result in a reduction in revenue, an increase
in costs, and a reduction in profitability;
- the failure of our Medicare-certified long term care hospitals
or inpatient rehabilitation facilities to maintain their Medicare
certifications may cause our revenue and profitability to
decline;
- the failure of our Medicare-certified long term care hospitals
and inpatient rehabilitation facilities operated as "hospitals
within hospitals" to qualify as hospitals separate from their host
hospitals may cause our revenue and profitability to decline;
- a government investigation or assertion that we have violated
applicable regulations may result in sanctions or reputational harm
and increased costs;
- acquisitions or joint ventures may prove difficult or
unsuccessful, use significant resources, or expose us to unforeseen
liabilities;
- our plans and expectations related to our acquisitions and our
ability to realize anticipated synergies;
- private third-party payors for our services may adopt payment
policies that could limit our future revenue and
profitability;
- the failure to maintain established relationships with the
physicians in the areas we serve could reduce our revenue and
profitability;
- competition may limit our ability to grow and result in a
decrease in our revenue and profitability;
- the loss of key members of our management team could
significantly disrupt our operations;
- the effect of claims asserted against us could subject us to
substantial uninsured liabilities;
- a security breach of our or our third-party vendors'
information technology systems may subject us to potential legal
and reputational harm and may result in a violation of the Health
Insurance Portability and Accountability Act of 1996 or the Health
Information Technology for Economic and Clinical Health Act;
and
- other factors discussed from time to time in our filings with
the Securities and Exchange Commission (the "SEC"), including
factors discussed under the heading "Risk Factors" of our quarterly
reports on Form 10-Q and in our annual report on Form 10-K for the
year ended December 31, 2022.
Except as required by applicable law, including the securities
laws of the United States and the
rules and regulations of the SEC, we are under no obligation to
publicly update or revise any forward-looking statements, whether
as a result of any new information, future events, or otherwise.
You should not place undue reliance on our forward-looking
statements. Although we believe that the expectations reflected in
forward-looking statements are reasonable, we cannot guarantee
future results or performance.
Investor inquiries:
Joel T. Veit
Senior Vice President and Treasurer
717-972-1100
ir@selectmedical.com
I. Condensed
Consolidated Statements of Operations
For the Three Months
Ended September 30, 2022 and 2023
(In thousands,
except per share amounts, unaudited)
|
|
|
|
2022
|
|
2023
|
|
%
Change
|
Revenue
|
|
$
1,567,794
|
|
$
1,665,694
|
|
6.2 %
|
Costs and
expenses:
|
|
|
|
|
|
|
Cost of services,
exclusive of depreciation and amortization
|
|
1,393,817
|
|
1,442,509
|
|
3.5
|
General and
administrative
|
|
39,491
|
|
41,316
|
|
4.6
|
Depreciation and
amortization
|
|
51,459
|
|
52,394
|
|
1.8
|
Total costs and
expenses
|
|
1,484,767
|
|
1,536,219
|
|
3.5
|
Other operating
income
|
|
8,440
|
|
485
|
|
N/M
|
Income from
operations
|
|
91,467
|
|
129,960
|
|
42.1
|
Other income and
expense:
|
|
|
|
|
|
|
Loss on early
retirement of debt
|
|
—
|
|
(14,692)
|
|
N/M
|
Equity in earnings of
unconsolidated subsidiaries
|
|
8,084
|
|
11,561
|
|
43.0
|
Interest
expense
|
|
(45,204)
|
|
(50,271)
|
|
11.2
|
Income before income
taxes
|
|
54,347
|
|
76,558
|
|
40.9
|
Income tax
expense
|
|
16,221
|
|
15,742
|
|
(3.0)
|
Net income
|
|
38,126
|
|
60,816
|
|
59.5
|
Less: Net income
attributable to non-controlling interests
|
|
10,960
|
|
12,636
|
|
15.3
|
Net income attributable
to Select Medical
|
|
$
27,166
|
|
$
48,180
|
|
77.4 %
|
Basic and diluted
earnings per common share:(1)
|
|
$
0.21
|
|
$
0.38
|
|
|
|
|
(1)
|
Refer to table III for
calculation of earnings per common share.
|
N/M
|
Not
meaningful
|
II. Condensed
Consolidated Statements of Operations
For the Nine Months
Ended September 30, 2022 and 2023
(In thousands,
except per share amounts, unaudited)
|
|
|
|
2022
|
|
2023
|
|
%
Change
|
Revenue
|
|
$
4,752,082
|
|
$
5,005,202
|
|
5.3 %
|
Costs and
expenses:
|
|
|
|
|
|
|
Cost of services,
exclusive of depreciation and amortization
|
|
4,191,377
|
|
4,284,931
|
|
2.2
|
General and
administrative
|
|
114,272
|
|
126,103
|
|
10.4
|
Depreciation and
amortization
|
|
153,579
|
|
154,758
|
|
0.8
|
Total costs and
expenses
|
|
4,459,228
|
|
4,565,792
|
|
2.4
|
Other operating
income
|
|
23,565
|
|
1,211
|
|
N/M
|
Income from
operations
|
|
316,419
|
|
440,621
|
|
39.3
|
Other income and
expense:
|
|
|
|
|
|
|
Loss on early
retirement of debt
|
|
—
|
|
(14,692)
|
|
N/M
|
Equity in earnings of
unconsolidated subsidiaries
|
|
19,648
|
|
30,618
|
|
55.8
|
Interest
expense
|
|
(121,770)
|
|
(147,839)
|
|
21.4
|
Income before income
taxes
|
|
214,297
|
|
308,708
|
|
44.1
|
Income tax
expense
|
|
53,983
|
|
70,775
|
|
31.1
|
Net income
|
|
160,314
|
|
237,933
|
|
48.4
|
Less: Net income
attributable to non-controlling interests
|
|
28,824
|
|
40,711
|
|
41.2
|
Net income attributable
to Select Medical
|
|
$
131,490
|
|
$
197,222
|
|
50.0 %
|
Basic and diluted
earnings per common share:(1)
|
|
$
1.01
|
|
$
1.55
|
|
|
|
|
(1)
|
Refer to table III for
calculation of earnings per common share.
|
N/M
|
Not
meaningful
|
|
|
III. Earnings per
Share For the Three and Nine Months Ended September 30,
2022 and 2023 (In thousands, except per share amounts,
unaudited)
|
Select Medical's capital structure includes common stock and
unvested restricted stock awards. To compute earnings per share
("EPS"), Select Medical applies the two-class method because its
unvested restricted stock awards are participating securities which
are entitled to participate equally with its common stock in
undistributed earnings.
The following table sets forth the net income attributable to
Select Medical, its common shares outstanding, and its
participating securities outstanding for the three and nine months
ended September 30, 2022 and
2023:
|
|
Basic and Diluted
EPS
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Net income
|
|
$
38,126
|
|
$
60,816
|
|
$
160,314
|
|
$
237,933
|
Less: net income
attributable to non-controlling interests
|
|
10,960
|
|
12,636
|
|
28,824
|
|
40,711
|
Net income attributable
to Select Medical
|
|
27,166
|
|
48,180
|
|
131,490
|
|
197,222
|
Less: net income
attributable to participating securities
|
|
992
|
|
1,722
|
|
4,588
|
|
7,155
|
Net income attributable
to common shares
|
|
$
26,174
|
|
$
46,458
|
|
$
126,902
|
|
$
190,067
|
The following tables set forth the computation of EPS under the
two-class method for the three and nine months ended
September 30, 2022 and 2023:
|
|
Three Months Ended
September 30,
|
|
|
2022
|
|
|
2023
|
|
|
Net Income
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
Net Income
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
(in thousands,
except for per share amounts)
|
Common
shares
|
|
$
26,174
|
|
122,193
|
|
$
0.21
|
|
|
$
46,458
|
|
123,400
|
|
$
0.38
|
Participating
securities
|
|
992
|
|
4,631
|
|
$
0.21
|
|
|
1,722
|
|
4,574
|
|
$
0.38
|
Total
|
|
$
27,166
|
|
|
|
|
|
|
$
48,180
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2022
|
|
|
2023
|
|
|
Net Income
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
Net Income
Allocation
|
|
Shares(1)
|
|
Basic and
Diluted EPS
|
|
|
(in thousands,
except for per share amounts)
|
Common
shares
|
|
$
126,902
|
|
125,341
|
|
$
1.01
|
|
|
$
190,067
|
|
122,865
|
|
$
1.55
|
Participating
securities
|
|
4,588
|
|
4,532
|
|
$
1.01
|
|
|
7,155
|
|
4,625
|
|
$
1.55
|
Total
|
|
$
131,490
|
|
|
|
|
|
|
$
197,222
|
|
|
|
|
|
|
|
(1)
|
Represents the weighted
average share count outstanding during the period.
|
IV. Condensed
Consolidated Balance Sheets
(In thousands,
unaudited)
|
|
|
|
December 31,
2022
|
|
September 30,
2023
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
97,906
|
|
$
77,440
|
Accounts
receivable
|
|
941,312
|
|
944,219
|
Other current
assets
|
|
232,095
|
|
254,428
|
Total Current
Assets
|
|
1,271,313
|
|
1,276,087
|
Operating lease
right-of-use assets
|
|
1,169,740
|
|
1,180,907
|
Property and equipment,
net
|
|
1,001,440
|
|
1,006,842
|
Goodwill
|
|
3,484,200
|
|
3,504,654
|
Identifiable intangible
assets, net
|
|
351,662
|
|
336,639
|
Other assets
|
|
386,938
|
|
378,879
|
Total
Assets
|
|
$
7,665,293
|
|
$
7,684,008
|
Liabilities and
Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Payables and
accruals
|
|
$
874,016
|
|
$
888,377
|
Current operating
lease liabilities
|
|
236,784
|
|
242,594
|
Current portion of
long-term debt and notes payable
|
|
44,351
|
|
35,085
|
Total Current
Liabilities
|
|
1,155,151
|
|
1,166,056
|
Non-current operating
lease liabilities
|
|
1,008,394
|
|
1,019,185
|
Long-term debt, net of
current portion
|
|
3,835,211
|
|
3,695,244
|
Non-current deferred
tax liability
|
|
169,793
|
|
146,919
|
Other non-current
liabilities
|
|
106,137
|
|
106,216
|
Total
Liabilities
|
|
6,274,686
|
|
6,133,620
|
Redeemable
non-controlling interests
|
|
34,043
|
|
26,999
|
Total equity
|
|
1,356,564
|
|
1,523,389
|
Total Liabilities
and Equity
|
|
$
7,665,293
|
|
$
7,684,008
|
V. Condensed
Consolidated Statements of Cash Flows
For the Three Months
Ended September 30, 2022 and 2023
(In thousands,
unaudited)
|
|
|
|
2022
|
|
2023
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
38,126
|
|
$
60,816
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Distributions from
unconsolidated subsidiaries
|
|
5,752
|
|
1,055
|
Depreciation and
amortization
|
|
51,459
|
|
52,394
|
Provision for expected
credit losses
|
|
(152)
|
|
340
|
Equity in earnings of
unconsolidated subsidiaries
|
|
(8,084)
|
|
(11,561)
|
Loss on extinguishment
of debt
|
|
—
|
|
175
|
Gain (loss) on sale or
disposal of assets
|
|
(117)
|
|
16
|
Stock compensation
expense
|
|
10,187
|
|
11,483
|
Amortization of debt
discount, premium and issuance costs
|
|
573
|
|
725
|
Deferred income
taxes
|
|
(5,115)
|
|
(6,173)
|
Changes in operating
assets and liabilities, net of effects of business
combinations:
|
|
|
|
|
Accounts
receivable
|
|
12,745
|
|
20,121
|
Other current
assets
|
|
5,051
|
|
(11,279)
|
Other
assets
|
|
8,375
|
|
1,556
|
Accounts payable and
accrued expenses
|
|
(19,008)
|
|
(3,330)
|
Government
advances
|
|
(5,529)
|
|
—
|
Net cash provided by
operating activities
|
|
94,263
|
|
116,338
|
Investing
activities
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
(2,786)
|
|
(12,750)
|
Purchases of property,
equipment, and other assets
|
|
(41,942)
|
|
(50,198)
|
Investment in
businesses
|
|
(10,333)
|
|
(74)
|
Proceeds from sale of
assets
|
|
50
|
|
4
|
Net cash used in
investing activities
|
|
(55,011)
|
|
(63,018)
|
Financing
activities
|
|
|
|
|
Borrowings on revolving
facilities
|
|
280,000
|
|
200,000
|
Payments on revolving
facilities
|
|
(250,000)
|
|
(205,000)
|
Proceeds from term
loans
|
|
—
|
|
2,092,232
|
Payments on term
loans
|
|
—
|
|
(2,108,694)
|
Borrowings of other
debt
|
|
3,372
|
|
8,551
|
Principal payments on
other debt
|
|
(8,291)
|
|
(11,925)
|
Dividends paid to
common stockholders
|
|
(15,893)
|
|
(16,035)
|
Repurchase of common
stock
|
|
(14,991)
|
|
(9,544)
|
Increase (decrease) in
overdrafts
|
|
1,964
|
|
(1,500)
|
Proceeds from issuance
of non-controlling interests
|
|
141
|
|
5,651
|
Distributions to and
purchases of non-controlling interests
|
|
(22,000)
|
|
(30,783)
|
Net cash used in
financing activities
|
|
(25,698)
|
|
(77,047)
|
Net increase (decrease)
in cash and cash equivalents
|
|
13,554
|
|
(23,727)
|
Cash and cash
equivalents at beginning of period
|
|
94,669
|
|
101,167
|
Cash and cash
equivalents at end of period
|
|
$
108,223
|
|
$
77,440
|
Supplemental
information
|
|
|
|
|
Cash paid for interest,
excluding amounts received of $6,129 and $22,069
under interest rate cap contract
|
|
$
69,238
|
|
$
88,116
|
Cash paid for
taxes
|
|
8,421
|
|
35,747
|
VI. Condensed
Consolidated Statements of Cash Flows
For the Nine Months
Ended September 30, 2022 and 2023
(In thousands,
unaudited)
|
|
|
|
2022
|
|
2023
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
160,314
|
|
$
237,933
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Distributions from
unconsolidated subsidiaries
|
|
16,892
|
|
9,896
|
Depreciation and
amortization
|
|
153,579
|
|
154,758
|
Provision for expected
credit losses
|
|
(41)
|
|
1,101
|
Equity in earnings of
unconsolidated subsidiaries
|
|
(19,648)
|
|
(30,618)
|
Loss on extinguishment
of debt
|
|
—
|
|
175
|
Gain on sale or
disposal of assets
|
|
(1,593)
|
|
(7)
|
Stock compensation
expense
|
|
27,956
|
|
31,991
|
Amortization of debt
discount, premium and issuance costs
|
|
1,696
|
|
1,899
|
Deferred income
taxes
|
|
(7,080)
|
|
(17,049)
|
Changes in operating
assets and liabilities, net of effects of business
combinations:
|
|
|
|
|
Accounts
receivable
|
|
(19,686)
|
|
(3,014)
|
Other current
assets
|
|
2,923
|
|
(17,276)
|
Other
assets
|
|
9,650
|
|
7,028
|
Accounts payable and
accrued expenses
|
|
30,167
|
|
25,799
|
Government
advances
|
|
(82,848)
|
|
—
|
Net cash provided by
operating activities
|
|
272,281
|
|
402,616
|
Investing
activities
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
(22,027)
|
|
(20,482)
|
Purchases of property,
equipment, and other assets
|
|
(135,119)
|
|
(168,597)
|
Investment in
businesses
|
|
(17,323)
|
|
(9,874)
|
Proceeds from sale of
assets
|
|
5,364
|
|
60
|
Net cash used in
investing activities
|
|
(169,105)
|
|
(198,893)
|
Financing
activities
|
|
|
|
|
Borrowings on revolving
facilities
|
|
845,000
|
|
635,000
|
Payments on revolving
facilities
|
|
(625,000)
|
|
(740,000)
|
Proceeds from term
loans
|
|
—
|
|
2,092,232
|
Payments on term
loans
|
|
—
|
|
(2,108,694)
|
Borrowings of other
debt
|
|
20,866
|
|
30,849
|
Principal payments on
other debt
|
|
(25,165)
|
|
(38,298)
|
Dividends paid to
common stockholders
|
|
(48,692)
|
|
(47,856)
|
Repurchase of common
stock
|
|
(193,614)
|
|
(11,050)
|
Decrease in
overdrafts
|
|
(9,091)
|
|
(1,967)
|
Proceeds from issuance
of non-controlling interests
|
|
7,096
|
|
20,463
|
Distributions to and
purchases of non-controlling interests
|
|
(40,663)
|
|
(54,868)
|
Net cash used in
financing activities
|
|
(69,263)
|
|
(224,189)
|
Net increase (decrease)
in cash and cash equivalents
|
|
33,913
|
|
(20,466)
|
Cash and cash
equivalents at beginning of period
|
|
74,310
|
|
97,906
|
Cash and cash
equivalents at end of period
|
|
$
108,223
|
|
$
77,440
|
Supplemental
information
|
|
|
|
|
Cash paid for interest,
excluding amounts received of $6,232 and $60,353
under the interest rate cap contract
|
|
$
143,455
|
|
$
221,697
|
Cash paid for
taxes
|
|
24,844
|
|
78,502
|
VII. Key
Statistics
For the Three Months
Ended September 30, 2022, and 2023
(unaudited)
|
|
|
|
2022
|
|
2023
|
|
%
Change
|
Critical Illness
Recovery Hospital
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
105
|
|
107
|
|
|
Revenue
(,000)
|
|
$ 524,584
|
|
$ 563,628
|
|
7.4 %
|
Number of patient
days(b)(c)
|
|
278,137
|
|
267,910
|
|
(3.7) %
|
Number of
admissions(b)(d)
|
|
9,056
|
|
8,736
|
|
(3.5) %
|
Revenue per patient
day(b)(e)
|
|
$
1,878
|
|
$
2,095
|
|
11.6 %
|
Occupancy
rate(b)(f)
|
|
67 %
|
|
64 %
|
|
(4.5) %
|
Adjusted EBITDA
(,000)
|
|
$
11,013
|
|
$
46,362
|
|
321.0 %
|
Adjusted EBITDA
margin
|
|
2.1 %
|
|
8.2 %
|
|
|
Rehabilitation
Hospital
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
31
|
|
33
|
|
|
Revenue
(,000)
|
|
$ 229,387
|
|
$ 247,101
|
|
7.7 %
|
Number of patient
days(b)(c)
|
|
109,076
|
|
112,095
|
|
2.8 %
|
Number of
admissions(b)(d)
|
|
7,517
|
|
7,840
|
|
4.3 %
|
Revenue per patient
day(b)(e)
|
|
$
1,931
|
|
$
2,025
|
|
4.9 %
|
Occupancy
rate(b)(f)
|
|
85 %
|
|
84 %
|
|
(1.2) %
|
Adjusted EBITDA
(,000)
|
|
$
49,772
|
|
$
53,626
|
|
7.7 %
|
Adjusted EBITDA
margin
|
|
21.7 %
|
|
21.7 %
|
|
|
Outpatient
Rehabilitation
|
|
|
|
|
|
|
Number of clinics
operated – end of period(a)
|
|
1,933
|
|
1,946
|
|
|
Working
days(g)
|
|
64
|
|
63
|
|
|
Revenue
(,000)
|
|
$ 284,993
|
|
$ 291,804
|
|
2.4 %
|
Number of
visits(b)(h)
|
|
2,404,868
|
|
2,627,362
|
|
9.3 %
|
Revenue per
visit(b)(i)
|
|
$
103
|
|
$
100
|
|
(2.9) %
|
Adjusted EBITDA
(,000)
|
|
$
25,715
|
|
$
26,346
|
|
2.5 %
|
Adjusted EBITDA
margin
|
|
9.0 %
|
|
9.0 %
|
|
|
Concentra
|
|
|
|
|
|
|
Number of centers
operated – end of period(b)
|
|
519
|
|
539
|
|
|
Working
days(g)
|
|
64
|
|
63
|
|
|
Revenue
(,000)
|
|
$ 444,576
|
|
$ 473,964
|
|
6.6 %
|
Number of
visits(b)(h)
|
|
3,273,031
|
|
3,281,042
|
|
0.2 %
|
Revenue per
visit(b)(i)
|
|
$
128
|
|
$
136
|
|
6.3 %
|
Adjusted EBITDA
(,000)
|
|
$
90,025
|
|
$
98,907
|
|
9.9 %
|
Adjusted EBITDA
margin
|
|
20.2 %
|
|
20.9 %
|
|
|
|
|
|
|
(a)
|
Includes managed
locations.
|
(b)
|
Excludes managed
locations. For purposes of the Concentra segment, onsite clinics
are excluded.
|
(c)
|
Each patient day
represents one patient occupying one bed for one day during the
periods presented.
|
(d)
|
Represents the number
of patients admitted to Select Medical's hospitals during the
periods presented.
|
(e)
|
Represents the average
amount of revenue recognized for each patient day. Revenue per
patient day is calculated by dividing patient service revenues,
excluding revenues from certain other ancillary and outpatient
services provided at Select Medical's hospitals, by the total
number of patient days.
|
(f)
|
Represents the portion
of our hospitals being utilized for patient care during the periods
presented. Occupancy rate is calculated using the number of patient
days, as presented above, divided by the total number of bed days
available during the period. Bed days available is derived by
adding the daily number of available licensed beds for each of the
periods presented.
|
(g)
|
Represents the number
of days in which normal business operations were conducted during
the periods presented.
|
(h)
|
Represents the number
of visits in which patients were treated at Select Medical's
outpatient rehabilitation clinics and Concentra centers during the
periods presented. COVID-19 screening and testing services provided
by our Concentra segment are not included in these
figures.
|
(i)
|
Represents the average
amount of revenue recognized for each patient visit. Revenue per
visit is calculated by dividing patient service revenue, excluding
revenues from certain other ancillary services, by the total number
of visits. For purposes of this computation for the Concentra
segment, patient service revenue does not include onsite clinics or
revenues generated from COVID-19 screening and testing
services.
|
VIII. Key
Statistics
For the Nine Months
Ended September 30, 2022, and 2023
(unaudited)
|
|
|
|
2022
|
|
2023
|
|
%
Change
|
Critical Illness
Recovery Hospital
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
105
|
|
107
|
|
|
Revenue
(,000)
|
|
$
1,672,247
|
|
$
1,732,645
|
|
3.6 %
|
Number of patient
days(b)(c)
|
|
840,487
|
|
831,022
|
|
(1.1) %
|
Number of
admissions(b)(d)
|
|
27,319
|
|
27,099
|
|
(0.8) %
|
Revenue per patient
day(b)(e)
|
|
$
1,981
|
|
$
2,076
|
|
4.8 %
|
Occupancy
rate(b)(f)
|
|
68 %
|
|
68 %
|
|
0.0 %
|
Adjusted EBITDA
(,000)
|
|
$
66,999
|
|
$
188,631
|
|
181.5 %
|
Adjusted EBITDA
margin
|
|
4.0 %
|
|
10.9 %
|
|
|
Rehabilitation
Hospital
|
|
|
|
|
|
|
Number of hospitals
operated – end of period(a)
|
|
31
|
|
33
|
|
|
Revenue
(,000)
|
|
$
678,908
|
|
$
719,419
|
|
6.0 %
|
Number of patient
days(b)(c)
|
|
321,690
|
|
330,142
|
|
2.6 %
|
Number of
admissions(b)(d)
|
|
22,149
|
|
23,363
|
|
5.5 %
|
Revenue per patient
day(b)(e)
|
|
$
1,934
|
|
$
2,001
|
|
3.5 %
|
Occupancy
rate(b)(f)
|
|
85 %
|
|
84 %
|
|
(1.2) %
|
Adjusted EBITDA
(,000)
|
|
$
141,996
|
|
$
155,531
|
|
9.5 %
|
Adjusted EBITDA
margin
|
|
20.9 %
|
|
21.6 %
|
|
|
Outpatient
Rehabilitation
|
|
|
|
|
|
|
Number of clinics
operated – end of period(a)
|
|
1,933
|
|
1,946
|
|
|
Working
days(g)
|
|
192
|
|
191
|
|
|
Revenue
(,000)
|
|
$
844,191
|
|
$
890,679
|
|
5.5 %
|
Number of
visits(b)(h)
|
|
7,165,866
|
|
7,984,622
|
|
11.4 %
|
Revenue per
visit(b)(i)
|
|
$
103
|
|
$
100
|
|
(2.9) %
|
Adjusted EBITDA
(,000)
|
|
$
85,912
|
|
$
89,395
|
|
4.1 %
|
Adjusted EBITDA
margin
|
|
10.2 %
|
|
10.0 %
|
|
|
Concentra
|
|
|
|
|
|
|
Number of centers
operated – end of period(b)
|
|
519
|
|
539
|
|
|
Working
days(g)
|
|
192
|
|
191
|
|
|
Revenue
(,000)
|
|
$
1,309,356
|
|
$
1,397,341
|
|
6.7 %
|
Number of
visits(b)(h)
|
|
9,604,441
|
|
9,766,881
|
|
1.7 %
|
Revenue per
visit(b)(i)
|
|
$
127
|
|
$
135
|
|
6.3 %
|
Adjusted EBITDA
(,000)
|
|
$
272,101
|
|
$
293,046
|
|
7.7 %
|
Adjusted EBITDA
margin
|
|
20.8 %
|
|
21.0 %
|
|
|
|
|
|
|
(a)
|
Includes managed
locations.
|
(b)
|
Excludes managed
locations. For purposes of the Concentra segment, onsite clinics
are excluded.
|
(c)
|
Each patient day
represents one patient occupying one bed for one day during the
periods presented.
|
(d)
|
Represents the number
of patients admitted to Select Medical's hospitals during the
periods presented.
|
(e)
|
Represents the average
amount of revenue recognized for each patient day. Revenue per
patient day is calculated by dividing patient service revenues,
excluding revenues from certain other ancillary and outpatient
services provided at Select Medical's hospitals, by the total
number of patient days.
|
(f)
|
Represents the portion
of our hospitals being utilized for patient care during the periods
presented. Occupancy rate is calculated using the number of patient
days, as presented above, divided by the total number of bed days
available during the period. Bed days available is derived by
adding the daily number of available licensed beds for each of the
periods presented.
|
(g)
|
Represents the number
of days in which normal business operations were conducted during
the periods presented.
|
(h)
|
Represents the number
of visits in which patients were treated at Select Medical's
outpatient rehabilitation clinics and Concentra centers during
the periods presented. COVID-19 screening and testing services
provided by our Concentra segment are not included in these
figures.
|
(i)
|
Represents the average
amount of revenue recognized for each patient visit. Revenue per
visit is calculated by dividing patient service revenue, excluding
revenues from certain other ancillary services, by the total number
of visits. For purposes of this computation for the Concentra
segment, patient service revenue does not include onsite clinics or
revenues generated from COVID-19 screening and testing
services.
|
|
|
IX. Net Income to
Adjusted EBITDA Reconciliation For the Three and Nine
Months Ended September 30, 2022 and 2023 (In
thousands, unaudited)
|
The presentation of Adjusted EBITDA is important to investors
because Adjusted EBITDA is commonly used as an analytical indicator
of performance by investors within the healthcare industry.
Adjusted EBITDA is used by management to evaluate financial
performance and determine resource allocation for each of Select
Medical's segments. Adjusted EBITDA is not a measure of financial
performance under accounting principles generally accepted in
the United States of America
("GAAP"). Items excluded from Adjusted EBITDA are significant
components in understanding and assessing financial performance.
Adjusted EBITDA should not be considered in isolation or as an
alternative to, or substitute for, net income, income from
operations, cash flows generated by operations, investing or
financing activities, or other financial statement data presented
in the consolidated financial statements as indicators of financial
performance or liquidity. Because Adjusted EBITDA is not a
measurement determined in accordance with GAAP and is thus
susceptible to varying definitions, Adjusted EBITDA as presented
may not be comparable to other similarly titled measures of other
companies.
The following table reconciles net income to Adjusted EBITDA for
Select Medical. Adjusted EBITDA is used by Select Medical to report
its segment performance. Adjusted EBITDA is defined as earnings
excluding interest, income taxes, depreciation and amortization,
gain (loss) on early retirement of debt, stock compensation
expense, gain (loss) on sale of businesses, and equity in earnings
(losses) of unconsolidated subsidiaries.
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
|
2022
|
|
2023
|
|
|
|
2022
|
|
2023
|
Net income
|
|
$
38,126
|
|
$
60,816
|
|
|
|
$
160,314
|
|
$
237,933
|
Income tax
expense
|
|
16,221
|
|
15,742
|
|
|
|
53,983
|
|
70,775
|
Interest
expense
|
|
45,204
|
|
50,271
|
|
|
|
121,770
|
|
147,839
|
Equity in earnings of
unconsolidated subsidiaries
|
|
(8,084)
|
|
(11,561)
|
|
|
|
(19,648)
|
|
(30,618)
|
Loss on early
retirement of debt
|
|
—
|
|
14,692
|
|
|
|
—
|
|
14,692
|
Income from
operations
|
|
91,467
|
|
129,960
|
|
|
|
316,419
|
|
440,621
|
Stock compensation
expense:
|
|
|
|
|
|
|
|
|
|
|
Included in general
and administrative
|
|
8,000
|
|
9,425
|
|
|
|
21,995
|
|
26,383
|
Included in cost of
services
|
|
2,187
|
|
2,058
|
|
|
|
5,961
|
|
5,607
|
Depreciation and
amortization
|
|
51,459
|
|
52,394
|
|
|
|
153,579
|
|
154,758
|
Adjusted
EBITDA
|
|
$
153,113
|
|
$
193,837
|
|
|
|
$
497,954
|
|
$
627,369
|
|
|
|
|
|
|
|
|
|
|
|
Critical illness
recovery hospital
|
|
$
11,013
|
|
$
46,362
|
|
|
|
$
66,999
|
|
$
188,631
|
Rehabilitation
hospital
|
|
49,772
|
|
53,626
|
|
|
|
141,996
|
|
155,531
|
Outpatient
rehabilitation
|
|
25,715
|
|
26,346
|
|
|
|
85,912
|
|
89,395
|
Concentra
|
|
90,025
|
|
98,907
|
|
|
|
272,101
|
|
293,046
|
Other(a)
|
|
(23,412)
|
|
(31,404)
|
|
|
|
(69,054)
|
|
(99,234)
|
Adjusted
EBITDA
|
|
$
153,113
|
|
$
193,837
|
|
|
|
$
497,954
|
|
$
627,369
|
|
|
|
|
(a)
|
Other primarily
includes general and administrative costs and other operating
income, as discussed further above.
|
|
|
X. Reconciliation of
Earnings per Common Share to Adjusted Earnings per Common
Share For the Three and Nine Months Ended September 30,
2022 and 2023 (In thousands, except per share amounts,
unaudited)
|
Adjusted net income attributable to common shares and adjusted
earnings per common share are not measures of financial performance
under GAAP. Items excluded from adjusted net income attributable to
common shares and adjusted earnings per common share are
significant components in understanding and assessing financial
performance. Select Medical believes that the presentation of
adjusted net income attributable to common shares and adjusted
earnings per common share are important to investors because they
are reflective of the financial performance of Select Medical's
ongoing operations and provide better comparability of its results
of operations between periods. Adjusted net income attributable to
common shares and adjusted earnings per common share should not be
considered in isolation or as alternatives to, or substitutes for,
net income, cash flows generated by operations, investing or
financing activities, or other financial statement data presented
in the consolidated financial statements as indicators of financial
performance or liquidity. Because adjusted net income attributable
to common shares and adjusted earnings per common share are not
measurements determined in accordance with GAAP and are thus
susceptible to varying calculations, adjusted net income
attributable to common shares and adjusted earnings per common
share as presented may not be comparable to other similarly titled
measures of other companies.
The following tables reconcile net income attributable to common
shares and earnings per common share on a fully diluted basis
to adjusted net income attributable to common shares and adjusted
earnings per common share on a fully diluted basis.
|
Three Months Ended
September 30,
|
|
2022
|
|
Per
Share(a)
|
|
2023
|
|
Per
Share(a)
|
Net income attributable
to common shares(a)
|
$
26,174
|
|
$
0.21
|
|
$
46,458
|
|
$
0.38
|
Adjustments:(b)
|
|
|
|
|
|
|
|
Loss on early
retirement of debt, net of tax
|
—
|
|
—
|
|
10,022
|
|
0.08
|
Adjusted net income
attributable to common shares
|
$
26,174
|
|
$
0.21
|
|
$
56,480
|
|
$
0.46
|
|
Nine Months Ended
September 30,
|
|
2022
|
|
Per
Share(a)
|
|
2023
|
|
Per
Share(a)
|
Net income attributable
to common shares(a)
|
$
126,902
|
|
$
1.01
|
|
$
190,067
|
|
$
1.55
|
Adjustments:(b)
|
|
|
|
|
|
|
|
Loss on early
retirement of debt, net of tax
|
—
|
|
—
|
|
10,016
|
|
0.08
|
Adjusted net income
attributable to common shares
|
$
126,902
|
|
$
1.01
|
|
$
200,083
|
|
$
1.63
|
|
|
|
|
(a)
|
Net income attributable
to common shares and earnings per common share are calculated based
on the weighted average common shares outstanding, as presented in
table III.
|
(b)
|
Adjustments to net
income attributable to common shares include estimated income tax
and non-controlling interest impacts and are calculated based on
the diluted weighted average common shares outstanding. The
estimated income tax impact, which is determined using tax rates
based on the nature of the adjustment and the jurisdiction in which
the adjustment occurred, includes both current and deferred income
tax expense or benefit.
|
|
|
XI. Net Income to
Adjusted EBITDA and Earnings per Share to Adjusted Earnings per
Share Reconciliations Business Outlook for the Year
Ending December 31, 2023 (In millions,
unaudited)
|
The following are reconciliations of full year 2023 Adjusted
EBITDA and adjusted income per common share expectations as
computed at the low and high points of the range to the closest
comparable GAAP financial measure. Refer to tables IX and table X
for discussion of Select Medical's use of Adjusted EBITDA and
adjusted income per common share in evaluating financial
performance. Refer to table IX for the definition of Adjusted
EBITDA and a discussion of Select Medical's use of Adjusted EBITDA
in evaluating financial performance. Each item presented in the
below table is an estimation of full year 2023 expectations.
|
Range
|
Non-GAAP Measure
Reconciliation
|
Low
|
|
High
|
Net income attributable
to Select Medical
|
$
227
|
|
$
249
|
Net income attributable
to non-controlling interests
|
53
|
|
56
|
Net income
|
280
|
|
305
|
Income tax
expense
|
89
|
|
97
|
Interest
expense
|
196
|
|
196
|
Equity in earnings of
unconsolidated subsidiaries
|
(39)
|
|
(42)
|
Loss on early
retirement of debt
|
15
|
|
15
|
Income from
operations
|
541
|
|
571
|
Stock compensation
expense
|
43
|
|
43
|
Depreciation and
amortization
|
211
|
|
211
|
Adjusted
EBITDA
|
$
795
|
|
$
825
|
|
|
|
Range
|
Non-GAAP Measure
Reconciliation
|
Low
|
|
High
|
Diluted earnings per
share
|
$
1.77
|
|
$
1.94
|
Adjustments:
|
|
|
|
Loss on early
retirement of debt, net of tax
|
0.08
|
|
0.08
|
Adjusted earnings per
share
|
$
1.85
|
|
$
2.02
|
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SOURCE Select Medical Holdings Corporation